# Many colleges and universities have been extensively advertising their services. For example, a university in Philadelphia used

## Question:

Many colleges and universities have been extensively advertising their services. For example, a university in Philadelphia used a biplane to pull a sign promoting its evening program, and one in Mississippi designed bumper stickers and slogans as well as innovative programs.

Suppose Hilliard College charges a comprehensive annual fee of $14,800 for tuition, room, and board, and it has capacity for 2,000 students. The admissions department predicts enrollment of 1,700 students for 20X1. Costs per student for the 20X1 academic year are as follows: The assistant director of admissions has proposed a 2-month advertising campaign using radio and television advertisements, together with an extensive direct mailing of brochures. 1. Suppose the advertising campaign will cost$1.41 million. What is the minimum number of additional students the campaign must attract to make the campaign break even?

2. Suppose the admissions department predicts that the campaign will attract 335 additional students. What is the most Hilliard should pay for the campaign and still break even?

3. Suppose a 3-month (instead of 2-month) campaign will attract 440 instead of 335 additional students. What is the most Hilliard should pay for the 1-month extension of the campaign and still break even?

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Related Book For

## Introduction to Management Accounting

ISBN: 978-0133058789

16th edition

Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta

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